September WTI crude oil futures were trading at $84.12 late Thursday, down $6.35, or 7.02%, for the week.
September WTI crude oil futures were trading at $84.12 late Thursday, down $6.35, or 7.02%, for the week.
Hormuz Still Decides the Supply StoryOne Qatari LNG tanker, Al Areesh, passed through Hormuz with Iran’s permission this week.
Weekly Technical ForecastThe direction of the Weekly September Crude Oil futures contract for the week-ending August 7 is likely to be determined by trader reaction to $81.21.
We’re not going to turn totally bearish on crude oil unless the 52-week moving average at $68.98 fails to hold.
The reversal showed that the earlier selling was built on diplomatic hope, not a restoration of crude flows. The risk premium returned, but it has not recovered all the ground lost earlier in the week. That is why WTI remains sharply lower week to date even after the war moved back to the center of the trade.
That trade broke down quickly. Iran rejected the Oman plan and launched missiles at U.S. forces. The United States and Saudi Arabia struck Iran-backed groups in Iraq, and U.S. Central Command followed with attacks on Revolutionary Guard targets inside Iran early Thursday.
The week opened with Washington’s pause in strikes and Oman’s proposal for regional management of Hormuz. That gave traders something concrete to sell. If the route could reopen under an arrangement accepted by Tehran and the Gulf states, the supply disruption would become a temporary shock rather than a lasting constraint. WTI came under heavy pressure as that possibility gained traction.
September WTI crude oil futures were trading at $84.12 late Thursday, down $6.35, or 7.02%, for the week. With Friday’s session still ahead, the weekly result is not final. But the week’s main story is clear: crude sold off hard when traders thought diplomacy could restore a workable route through the Strait of Hormuz, then rebuilt part of that risk premium when the military exchange returned.
September WTI crude oil futures were trading at $84.12 late Thursday, down $6.35, or 7.02%, for the week. With Friday’s session still ahead, the weekly result is not final. But the week’s main story is clear: crude sold off hard when traders thought diplomacy could restore a workable route through the Strait of Hormuz, then rebuilt part of that risk premium when the military exchange returned.
The week opened with Washington’s pause in strikes and Oman’s proposal for regional management of Hormuz. That gave traders something concrete to sell. If the route could reopen under an arrangement accepted by Tehran and the Gulf states, the supply disruption would become a temporary shock rather than a lasting constraint. WTI came under heavy pressure as that possibility gained traction.
That trade broke down quickly. Iran rejected the Oman plan and launched missiles at U.S. forces. The United States and Saudi Arabia struck Iran-backed groups in Iraq, and U.S. Central Command followed with attacks on Revolutionary Guard targets inside Iran early Thursday.
The reversal showed that the earlier selling was built on diplomatic hope, not a restoration of crude flows. The risk premium returned, but it has not recovered all the ground lost earlier in the week. That is why WTI remains sharply lower week to date even after the war moved back to the center of the trade.
Hormuz Still Decides the Supply Story
One Qatari LNG tanker, Al Areesh, passed through Hormuz with Iran’s permission this week. That was a useful test of the route, but not a reopening. Shipping works on repeatable traffic, not individual clearances. The seven-day average of tanker calls through the strait remains severely depressed, while security concerns limit traffic through the Red Sea. IMF PortWatch and Reuters confirm the cautious passage and wider disruption.
The question is whether Gulf barrels can move through Hormuz often enough for refiners to plan around them. Until traffic proves it can recover and stay recovered, every diplomatic report will face a high burden of proof.
The EIA Report Added a Domestic Supply Signal
U.S. commercial crude stocks fell 7.2 million barrels to 404.5 million barrels in the week ended July 24, leaving inventories about 7% below the five-year average. Cushing stocks dropped to 18.6 million barrels, while refinery utilization climbed to 97.2%. The EIA report confirms that refiners are running hard as the domestic stock cushion shrinks.
The Strategic Petroleum Reserve fell to 307.7 million barrels, its lowest level since 1983. Emergency barrels are buying time, but each release reduces the buffer available if the conflict creates a longer supply problem.
Weekly Light Crude Oil Futures
Trend Indicator Analysis
September WTI crude oil futures are in a position to close sharply lower this week after whipsawing across a critical retracement zone at $81.21 to $84.53, which could develop into new support. Additional support is a longer-term retracement zone at $75.40 to $70.70 along with the 52-week moving average at $68.98. Controlling it all is the main bottom at $67.12.
The next upside targets are the May and July swing tops at $93.50 and $95.30, respectively. Taking out the former with conviction will put the psychological $100.00 level on the radar with additional targets at $105.21 and $110.00. It will also change the main trend to up according to the weekly swing chart.
The first sign of possible sustained weakness will be a close under $81.21. If this creates enough downside momentum, we could see a pullback into the support cluster formed by the 61.8% level at $70.70 and the 50-day moving average at $68.98.
Weekly Technical Forecast
The direction of the Weekly September Crude Oil futures contract for the week-ending August 7 is likely to be determined by trader reaction to $81.21.
Bullish Scenario
A sustained move above $81.21 will signal the presence of buyers, not just short-covering. This will put the market in a position to extend the gains into the pair of main tops at $93.50 and $95.30. Overtake this level, and the buying gets a little more serious with $100.00 or more the next objective.
Bearish Scenario
A sustained move under $81.21 will indicate the presence of sellers. The first area of focus will be $75.40 to $70.70. This would be the last support area before the 52-week moving average at $68.98.
Weekly Outlook
Friday will decide the final weekly number, but next week opens with WTI caught between two forces. The war and weak Hormuz traffic keep supply risk alive. The sharp weekly decline shows traders still believe a workable de-escalation would remove a large part of the premium.
The next durable move will come from physical evidence. A sustained recovery in tanker traffic would validate the bears’ argument. Further military action or signs that cargoes remain trapped would put the inventory draw and shrinking emergency reserve back in control.
Technically, trader reaction to $81.21 to $84.53 will tell us whether short-covering or new buying is driving the price action. A sustained move over $81.21 will indicate that buyers are being aggressive and willing to take out offers.
A pullback under $81.21 could drop prices back to $75.40 to $70.70, but this won’t necessarily be bearish. It could mean that buyers would rather passively bid than actively take out offers. We’re not going to turn totally bearish on crude oil unless the 52-week moving average at $68.98 fails to hold.
Technically, next week is about momentum and whether the rally can extend beyond $95.30. The market appears well supported, with buyers likely to step in on dips over the next several weeks. The key question is how much of that buying is fresh demand and how much is short-covering.
